Widespread variations in Medicare spending on drugs across USA

Expenditure on medicines by America's Medicare patients in some regions of the USA is significantly more than seniors in other parts of the country, with some spending almost double but without lowering medical care costs, according to research published last week in the New England Journal of Medicine (NEJM).

"Our findings reinforce the importance of understanding the drivers of geographic variation, since increases in medical spending or pharmaceutical spending do not appear to be associated with offsetting savings in the other realms," said lead researcher Yuting Zhang, an assistant professor of health economics at the University of Pittsburgh Graduate School of Public Health. "Spending on pharmaceuticals itself is variable and thus warrants scrutiny similar to that given to medical spending in order to glean lessons about optimal prescribing, insurance characteristics, and resource allocation," she added.

The researchers noted that widespread geographic variation in Medicare spending has garnered a great deal of attention in the health care reform debate, both as a marker of inefficient resource use and as a window into potential strategies for improving the quality and value of US health care. Analyses to date, however, have focused solely on Medicare in-patient and out-patient spending (Parts A and B) and have lacked information on pharmaceutical spending (Part D).